A series of positive economic reports for job advertising, home prices, construction and manufacturing is unlikely to deter the Reserve Bank from cutting interest rates when its board meets on Tuesday.
ANZ job ads – a pointer to future employment – rose by a further 9.4 per cent in October, but are still down 13.5 per cent from their February level and prior to the onslaught of the coronavirus pandemic.
ANZ senior economist Catherine Birch said the steady recovery has seen job ads regain more than three-quarters of the plunge recorded in April and May.
“We think job ads will need to exceed pre-pandemic levels for some time to ensure the ongoing recovery in employment and reduce labour market underutilisation,” she said.
Meanwhile, residential property values increased across the nation in October apart from locked-down Melbourne, with prices in Brisbane, Adelaide, Hobart and Canberra also reaching record highs.
CoreLogic’s national home value index rose 0.4 per cent in October, ending five months of consistent declines.
Although values were lower across Melbourne through October, the decline of 0.2 per cent in the month was the smallest drop since the COVID-19 related downturn began in April.
Australian Bureau of Statistics figures showed demand for home loans among owner-occupiers also rose six per cent in September, while business loans for construction surged 57.2 per cent. However, the latter was still down 47.3 per cent on the year.
In addition, the ABS said dwelling approvals jumped 15.4 per cent in September, with private sector houses rising 9.7 per cent and dwellings other than houses surging 23.4 per cent.
Meanwhile, Australia’s manufacturing sector has seen a marked improvement despite carrying the deadweight of Victoria’s coronavirus lockdown.
The Australian Industry Group’s manufacturing index increased by 9.6 points to 56.3 in October.
It is the first time since July the index has been above 50 points, indicating the sector is in expansion.
The surge was led by NSW, while respondents across all sectors noted a jump in sales and new orders as a result of pent-up demand from initial coronavirus restrictions.
Ai Group chief executive Innes Willox said the lift in sales and strong growth in new orders were encouraging signs of improving household and business confidence.
“With restrictions in Victoria being lifted there are very good prospects of further strength in the closing months of 2020,” Mr Willox said.
Economists are still predicting the central bank to cut the cash rate to 0.1 per cent from the already record low of 0.25 per cent, while making the similar changes to other interest rate and funding levers.
RBA governor Philip Lowe appeared to lay the ground for a cut in a speech last month, saying as the economy opens up “it is reasonable to expect that further monetary easing would get more traction than was the case earlier”.